Power sector pays some dues

PSO receives Rs24.5 billion from Wapda, Kapco, Hubco as money reaches Pakistan State Oil.

KARACHI: Pakistan State Oil has received payments worth Rs24.5 billion against outstanding dues that were owed by various power sector companies.

PSO official spokesperson told The Express Tribune that Rs3.2 billion has been received from the Water and Power Development Authority (Wapda) for supplies to the power generator.

She added that Rs10.1 billion has been received from Kot Addu Power Company (Kapco) and Rs11.2 billion has been received from Hub Power Company (Hubco).

Two days earlier, PSO had issued distress calls to the ministry of petroleum and natural resources after the company’s receivables swelled to levels that threatened its overdraft facility with banks. According to a document sent by PSO to the ministry, the company’s outstanding receivables on December 23 stood at a mind-boggling Rs155.01 billion.

Of this amount, Wapda owed Rs51.2 billion while the two largest independent power providers Kapco and Hubco owed Rs27.24 billion and Rs62.6 billion respectively.

Karachi Electric Supply Company owed the oil marketing giant Rs1.99 billion.

“The financial position of the company had become dire and we addressed the finance ministry to draw attention of the government to this critical situation,” said the PSO spokesperson.

She added that “the finance ministry released money to Pakistan Electric Power Company (Pepco) which was then distributed to power producers and eventually reached PSO as payment against the outstanding dues on the consumption of furnace oil.”

This was not the first time that government intervention has been necessary to rescue the country’s biggest oil marketing company as persistent inter-corporate debt in the energy sector has threatened its ability to pay international suppliers for the purchase of oil on multiple occasions in recent months.

Published in The Express Tribune, December 25^th, 2010.